Factor Intensity, product switching, and productivity: Evidence from Chinese exporters
Yue Ma,
Heiwai Tang and
Yifan Zhang
Journal of International Economics, 2014, vol. 92, issue 2, 349-362
Abstract:
This paper analyzes how a firm's specialization in its core products after exporting affects its factor intensity and productivity. Using Chinese manufacturing firm data for the 1998–2007 period, we find that firms become less capital-intensive but more productive after exporting, compared to non-exporters that share similar ex ante characteristics. To rationalize these findings that contrast with existing studies, we develop a variant of the model by Bernard, Redding, and Schott (2010, 2011) to consider firms producing multiple products with varying capital intensity. The model predicts that when a firm in a labor-abundant country starts exporting, it specializes in its core competencies by allocating more resources to produce more labor-intensive products. Firm ex ante productivity is associated with a smaller decline in capital intensity after exporting. A sharper post-export decline in capital intensity is associated with a larger increase in measured total factor productivity. We find firm-level evidence supporting these predictions. Using transaction-level data for the 2000–2006 period, we show that Chinese new exporters add products that are less capital-intensive than their existing products and drop those that are more capital-intensive in subsequent years.
Keywords: Exporters; Productivity; Factor intensity; Multi-product firms (search for similar items in EconPapers)
JEL-codes: F11 L16 O53 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (92)
Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0022199613001116
Full text for ScienceDirect subscribers only
Related works:
Working Paper: Factor Intensity, Product Switching, and Productivity: Evidence from Chinese Exporters (2013) 
Working Paper: Factor Intensity, Product Switching, and Productivity: Evidence from Chinese Exporters (2012) 
Working Paper: Factor Intensity, Product Switching, and Productivity: Evidence from Chinese Exporters (2011) 
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
HTML/Text
Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:92:y:2014:i:2:p:349-362
DOI: 10.1016/j.jinteco.2013.11.003
Access Statistics for this article
Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés
More articles in Journal of International Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().